Posted on 27 April 2011

Many venture capitalists like to say they invest in people, not ideas. That seems particularly true in the case of Milk, Kevin Rose’s new mobile development firm, which just raised $1.5 million in angel funding.

Rose, of course, is famous for founding social news aggregator Digg, but he resigned earlier this year, after the company launched a controversial redesign and seemed to stagnate. He reemerged in April with Milk, which he said consists of a small team that will experiment with different app ideas, hopefully launching four-to-six ambitious apps in a year.

The “development lab” model seems to be a nice career path for entrepreneurs who have launched one or two successful companies and now want to create cool new products without the headache of running a mature company. AdMob Omar Hamoui recently announced his own project, Churn Labs, which has backing from Sequoia Capital.

I’ve already been impressed by the speed of Instagram’s growth, and the San Francisco startup shared more numbers today — it said it now has nearly 2 million registered users who post more than 290,000 photos per day. Again, that’s less than four months after the app first launched.

Posted on 16 November 2010

Optimizely, a website-testing startup, has raised $1.2 million in an all-angel funding round, the company told VentureBeat today, as marketers continue to search for new ways to track, measure and hold onto the “best” traffic their websites are getting.

A/B testing, Optimizely’s specialty, involves testing several different versions of a Web page with live users and then measuring the effect each version has on users’ actions.

Optimizely does this by measuring the number of visitors who saw each version, clicked through and then decided to purchase or take other actions. That gives marketers a more numbers-driven idea of which version will work best at attracting new customers, donations or whoever they are trying to draw into the site.

“On average, only 2 percent of website visitors actually turn into customers, and most companies aren’t doing anything to improve this because testing has always been too hard,” said cofounder Dan Siroker (pictured). “By focusing on usability, we’ve created a product anyone can use, not just techies.”

It offers monthly subscriptions starting at $19 a month and says it often is capable of boosting revenue and customer conversions by 10 percent or more. Optimizely currently tracks about 250 million “events” each month but has not yet released its numbers on unique visitors.

San Francisco-based Optimizely was launched in July and immediately caught the eye of some big name clients, including the Democratic National Committee, which is not surprising considering Siroker was formerly director of analytics for the Obama presidential campaign. The DNC then quickly put it to work on its “Commit to Vote” Facebook application during this fall’s mid-term elections.

Other marquee-name clients include Causes, Cloudera, Shopify, the Clinton Foundation, CafePress and TRUSTe. Optimizely also attracted attention early on from celebrity startup backer Ashton Kutcher, an actor and producer who is also a well-known angel for trendy tech startups, and who has been with the A/B testing company from the beginning. (He also contributed to this funding round.)

The real-world implications of fast, efficient A/B testing are clear, Marie Ewald, former director of online fundraising for the Clinton Foundation, said in a statement.

“With a disaster like the Haiti earthquake, every second counts when it comes to attracting donations — and it goes without saying that every dollar counts,” said Ewald. “In less than 48 hours, we tested eight versions of the donation page and, through this experiment, we were able to generate an additional $1,022,571 in online revenue.”

Posted on 15 August 2010

Felicis Ventures, the firm created by early Googler (and VentureBeat investor) Aydin Senkut, just announced that it has raised $40 million. It’s the firm’s first institutional fund.

Felicis says it will continue to focus on early-stage mobile and Internet investments. Senkut has invested in more than 60 startups, and 15 of them have already been been acquired. Purchased companies include personal finance startup Mint.com (acquired by Intuit), semantic search startup Powerset (acquired by Microsoft), and mobile gaming startup Tapulous (acquired by Disney).

The Palo Alto, Calif. firm describes this as a “super angel” fund, and the fund was first revealed in a Wall Street Journal article about the super angel trend — namely, the rise of angel investors who form an “unofficial upper class” thanks to their cachet and ability to attract other investors. The article highlights how, as Redpoint Ventures‘ Geoff Yang puts it, venture capitalists are still trying to figure out whether these investors are “friend or foe.”

Felicis backers include institutional investors Flag Capital and Weathergage Capital, and individual investors Peter Thiel (PayPal cofounder), Joshua Schachter (Delicious founder), and Paul Buchheit (Gmail creator and FriendFeed cofounder). The firm is also creating a Founders Advisory Board for its portfolio companies, with Schachter and Buchheit as the board’s first two members.

“With this new fund, we plan to expand our reach in two ways: fast growing horizontal markets such as mobile applications and e-commerce, in addition to Internet and mobile companies in four verticals –- education, healthcare, personalized medicine and energy conservation,” Senkut said in a press release.

Posted on 26 March 2010

Angel investors don’t usually stay up at night worrying about Capitol Hill. But a financial reform bill proposed by Chris Dodd, the Democrat chairing the Senate Banking Committee, includes new restrictions on startups and angels.

There are three changes that should have a particular effect on angel investors, a catch-all category which includes everyone from friends and family members who invest in a startup, to unaffiliated wealthy individuals, to side investments made by venture capitalists acting on their own.

Frist, Dodd’s bill would require startups raising funding to register with the Securities and Exchange Commission, and then wait 120 days for the SEC to review their filing. A second provision raises the wealth requirements for an “accredited investor” who can invest in startups — if the bill passes, investors would need assets of more than $2.3 million (up from $1 million) or income of more than $450,000 (up from $250,000). The third restriction removes the federal pre-emption allowing angel and venture financing in the United States to follow federal regulations, rather than face different rules between states.

Several investors have written pointed critiques of the bill:

Fred Wilson of Union Square Ventures said startups will be “hit by shrapnel” from the bill.

Robert E. Litan of the Kauffman Foundation, which researches entrepreneurship, wrote, “It is difficult to know why these provisions are in a much larger bill whose primary aim is to address the fundamental causes of the recent financial crisis.”

Mike Masnick at tech policy site Techdirt described the restrictions as “somewhat horrifying.”

Investors offered more criticism on Twitter, with Slide vice president Keith RaboisChris Sacca, an angel investor and former Googler who campaigned for Obama, also “>a petition against the investing regulations.

I asked Sacca for more details about his opposition. In a voicemail, he said:

Obviously, I’m deeply concerned about Senator Dodd’s proposal to place these restrictions on angel investing. I think angel investing is undeniably one of the largest engines for job creation as well as innovation and competitiveness on the global scale for the United States. There’s no doubt about it that the restrictions that he’s proposing would absolutely chill investing.

Specifically, one of the things we need to take into account is while 10 years ago it may have taken years to build a company, companies are now built in a matter of weeks. So this 120-day waiting period is frankly ridiculous. I have companies with tens of thousands and hundreds of thousands of users that are built in a matter of weeks. They’re generating actual dollars of revenue, creating jobs, investing in real estate office space, capital equipment, etc. If they had to wait 120 days to actually apply for the ability to obtain financing it absolutely just crush that market.

I think this is a very short-sighted proposal. It seems far afield from the problems that the banking committee is actually trying to address.

This outrage may not be futile, either. A source in the Senate Banking Committee told PEHub that the committee is talking the complaints seriously.